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Development conflict alleged

November 14, 2012, 05:00 AM By Bill Silverfarb Daily Journal staff

James Fang

Bay Area Rapid Transit Director James Fang has been urged to recuse himself from ongoing negotiations related to a real estate development in Millbrae and has been accused of unethically lobbying on behalf of a personal friend’s proposal to build a new hotel on BART-owned land.

Republic Urban Properties LLC sent a letter to the BART board yesterday detailing its concerns over a hotel proposal championed by Fang from Justin Development that has been held mostly behind closed doors.

Fang, however, told the Daily Journal yesterday that Republic is simply trying to "put a cloud” over what is the best deal for BART and Millbrae.

He also said Justin Development owner Lawrence Lui "is a friend” but that staff has done the negotiating with the developer and that the board simply votes on the proposals. Fang’s family owns a large commercial building on El Camino Real in Burlingame just a few blocks from the Millbrae BART station.

"Fang must recuse himself from the Millbrae BART station real estate development because he has flagrantly and unethically lobbied for a project that would benefit his family as well as a major contributor to his political campaigns,” according to the letter sent to the BART board from the legal firm Moscone, Emblidge, Sater and Otis on behalf of its client Republic.

BART requested proposals for the site in 2008 and asked both Republic and Justin to resubmit "best and final” offers for the development Sept. 28 despite the BART board voting 6-2 in May 2011 to negotiate exclusively with Justin to build a hotel on the site.

Lui is the driving force behind the Justin Development proposal and is a friend of Fang who contributed $3,500 to Fang’s re-election campaign to the BART board last year.

The cozy relationship between the two is a "conflict of interest,” Republic contends, especially since Fang lobbied on behalf of the hotel project to the Millbrae City Council last month.

Republic’s proposal to BART includes a commercial, mixed-use transit-oriented development it says will be more beneficial to both BART and the city of Millbrae.

An independent study showed the hotel proposal to be infeasible and BART staff previously determined Republic’s proposal offered more new riders to the system and would generate more money for BART than other proposals, according to the letter Republic sent to the BART board yesterday.

But Fang said the hotel project would generate significant hotel tax for Millbrae, more revenue than the other project would generate in taxes for the city.

He also said the commercial property the Fangs own nearby, mostly medical offices, would not benefit from the construction of a hotel on the BART site.

"It’s a cheap shot,” Fang said about the accusations. "We will let the board decide and Republic has friends on the board, too.”

Moving forward, Republic wants future project discussions to be held in public to ensure transparency and "an open debate about the merits and benefits of the competing proposals.”

Fang, however, will not have to recuse himself from voting on the project.

"BART is not aware of any legal conflict of interest that would prevent Fang from participating in these discussions,” said BART spokeswoman Luna Salaver.

Fang was first elected to the BART board in 1990 and is its longest-serving director.

Bill Silverfarb can be reached by email: silverfarb@smdailyjournal.com or by phone: (650) 344-5200 ext. 106.